Major glitch in Bitcoin network sparks sell-off

quote:A technical glitch in the core Bitcoin software forced developers to call for a temporary halt to Bitcoin transactions, sparking a sharp sell-off. The currency's value briefly fell 23 percent to $37 before regaining much of its value later in the evening.

The core of the Bitcoin network is a shared transaction register known as the blockchain. Approximately every 10 minutes, a new block is created containing a record of all Bitcoin transactions that occurred since the previous block. Nodes in the network, known as miners, race to "discover" this next block by solving a cryptographic puzzle. The winner of this race announces the new block to the other nodes. The other nodes verify that it complies with all the rules of the Bitcoin protocol and then accepts it as the next official entry in the block chain, starting the race anew.

It's essential for all miners to enforce exactly the same rules about what counts as a valid block. If a client announces a block that half the network accepts and the other half rejects, the result could be a fork in the network. Different nodes could disagree about which transactions have occurred, potentially producing chaos.

That's what happened on Monday evening. A block was produced that the latest version of the Bitcoin software, version 0.8, recognized as valid but that nodes still running version 0.7 or earlier rejected.

re: Major glitch in Bitcoin network sparks sell-off(Posted by LSURussian on 3/12/13 at 7:43 am to rickgrimes)

You obviously don't understand cryptography, especially the sophisticated cryptography used by bitcoins.

It is sharable, fresh-thinking unit enhancer cryptography using extended exuding hexidecimal projection technology which cannot be reversed even using a reverse-engineered heuristic instruction counterweight via a cross-platform optimal open system.*

I hope this helps you understand the wonderfulness that is bitcoins...

re: Major glitch in Bitcoin network sparks sell-off(Posted by WikiTiger on 3/12/13 at 8:50 am to boosiebadazz)

I wonder how much overreaction will be contained in this thread.

FWIW, I was present for the whole event last night and I watched as the issue was discovered to it being resolved, all in just a few hours. That's a pretty good response time, as opposed to this bank, wouldn't you agree?

re: Major glitch in Bitcoin network sparks sell-off(Posted by Waffle House on 3/12/13 at 8:59 am to WikiTiger)

quote:That's a pretty good response time, as opposed to this bank, wouldn't you agree?

Sure, but it was an incident isolated to only that bank and their customers. It also didn't devalue the currency of those with holdings.

Question for you Wiki, would it be possible for a group of individuals to manufacture one of these events to trigger a sell off? Are there limits on acquiring bitcoins and how quickly do the transactions occur?

re: Major glitch in Bitcoin network sparks sell-off(Posted by WikiTiger on 3/12/13 at 9:05 am to Waffle House)

quote:would it be possible for a group of individuals to manufacture one of these events to trigger a sell off?

Doubtful. This issue was related to the new version of the bitcoin software processing blocks that were larger than the old versions could handle. Since there are still people using the older version, it caused a fork in the blockchain. In order to intentionally pull something like that off, you'd have to somehow get a very large amount of people to simultaneously use your new version of the software. And in that case, it would only cause a fork and would not effect the official blockchain. The confusion might cause a temporary price drop, but just as last night, it would probably quickly recover.

quote:Are there limits on acquiring bitcoins and how quickly do the transactions occur?

The bitcoin protocol itself has no limits on acquiring other than the overall limits on the total amount of bitcoins being released. Exchanges, however, do have rules on this, and have been known to shut down trading when necessary.

yes, he was on the internet during the hours that bitcoin was not being accepted for transactions. in case this caused you to have doubts - KEEP CALM, WIKI WAS PRESENT.

and the appropriate analogy wouldn't be a bank closing. the correct analogy would be that for multiple hours, with no warning and without anyone knowing why, US dollars were no longer accepted anywhere as currency. i know, big deal, dollars dont even have cryptography lolz!